Fresh from his success nationalising the Post Office pension, which artificially knocked £23 billion off the national debt, the Chancellor has come up with another manoeuvre which effectively adds £35bn to the total of QE – and analysts think this just save him from having to tear up his fiscal rule in next month’s mini-Budget. CoffeeHousers may remember that two years ago, Osborne said that the debt-to-GDP ratio would be falling by 2015/16. But the outlook between his first budget and his last one has deteriorated rapidly.
But help may be at hand. There is a lot of spare cash from debt interest hanging about in the Asset Purchase Facility: the interest that has accumulated on the gilts bought as part of Quantitative Easing. It was today announced that the cash is being transferred from the Bank of England’s QE budget back to the Treasury.
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